3. Population: 1.3 billion
Urban population: 43% of total population
Rate of urbanization: 2.7% annual rate of
change (2005-10 est.)
GDP global rank: #3
Behind the European Union and the U.S.
GDP, real growth rate: 10.3%
GDP per capita: US$7,400
Exchange Rate: 1 USD = 6.2452 YUAN
The Market: China
4. Market’s Problem
Half of China’s tap water failed to meet national
standards in 2009
Water treatment plants using traditional technology
cannot eliminate heavy metal pollutants
Contamination from old water pipes
Emissions from manufacturing, sewage, industrial spills
and extensive use of agricultural fertilizers are major
contributors to the lowered drinking quality across the
PRC
9. Product: Who are we?
Currently owned by Warren
Buffet, apart of Berkshire
Hathaway’s Marmon group
Manufacture 97% of their
products High quality
control
$1 Billion in US Sales (2011)
10. Our Target Market
The Urban Commercial Sector
Hotels, Apartments, Builders, Restaurants, Hospitals, Hea
lth clubs, and Office buildings
Secondary Market: Residential home owners
11. Product Line
Water Softening System
Selling Price: $18,000
Eliminate: Soap scum in the shower
and tub
Damage due to scale in your pipes and
appliances
Stains on your
sinks, tubs, showers, and clothing
Increases the water safety of
Commercial Properties
Salt Selling Price: $5/bag
20 Bags/unit
2x per year
First fill free with installation
12. Product Line
Reverse Osmosis System
Selling Price: $1,500
State-of-the-art filters will
improve the quality of water
from wells or municipal supplies
alike
Eliminates tastes and odors in
drinking water
Further eliminates
Arsenic, Lead, Nitrates, and
other contaminants
Filter Costs: $100
Once a year
14. Marketing Budget
Item Budget
Travel Cost (Joy Travel) • $1,000 x 3 = $3,000 for round trip
Dallas, TX to Shanghai (PVG).
• $5,000 Total Travel Costs
Marketing Research $1,000,000
Legal Costs $500,000
Home Shows/Expositions 45 (15 a year) @ $65 each = $2,925
Promotional Items $100,000.00 x 3 years = $300,000
Subway Advertisements $2,000,000.00 over the span of 3 years
Total Cost $3,807,925.00
16. Hornet Import & Export Group
Located in the Zhejiang and
Guangdong provinces.
Relatively close to Shanghai
and many other busy ports.
Storage facilities are made for
large quantities of stock which
in return will lower our cost per
unit.
Global distribution headquarters
are located in China. Very
Established and aware of the
procedures for importing and
exporting goods in China.
All manufactured goods will be
shipped over seas to our
distribution warehouse. From
there, the products will be checked
for damages, then they will be
distributed and installed at the
proper destination.
Hornet is the most up to date and
closest modern warehousing facility
in China. From storing to
transporting goods, they have
proven to be the most reliant and
efficient importer of goods in China.
19. Time Line
January -
March
• Marketing Research in Shanghai
• Move into Headquarters
• Meet with Hornet to finalize logistical planning
April - June
• Build competitive website
• Begin Advertising & Networking
• Order 1st shipment based on Marketing Research
• Employee training (Sales, Installation process, Customer service)
July -
December
• Sell!
• Place Possible Second Order
• Gear up to repeat in Shandong & Fujian
Repeat
• Year 2: Shandong & Fujian
• Year 3: Beijing
23. Estimated Revenue
Factors to remember:
Large urban population
Continual building of new properties
Prominent upper class market
Bad water is no longer the norm
Constant demand for filters and salt
24. Estimated Revenue Cont.
Profit Margin: 35%
Cost Breakdown:
Cost of Product: 50%
Shipping Costs: 20%
Building & Employee Costs: 30%
Product Cost Selling Price Profit/System
Commercial Water
Softening System
($11,700) $18,000 $6,300
Reverse Osmosis
System
($975) $1,500 $525
Filter ($65) $100 $35
Bag of Salt ($1) $5 $4
Item Cost/Year
(per city)
Product $10,355,000
Shipping $1,742,000
Employees
& Building
$2,964,000
25. Estimated Revenue Cont.
Product
Profit/
Sale
Expected
Sales/Year
(per city)
Total
Profit/Year
(per city)
Total Profit for
4 Cities
(After 3 Years)
Commercial Water
Softening System
$6,300 300 $1,890,000 $15,120,000
RO system $525 5,000 $2,625,000 $21,000,000
Filters $35 5,000 $175,000 $1,400,000
Salt $4 6,000 $24,000 $192,000
(Total Marketing Costs) ($3,807,925)
Total $4,714,000 $33,904,075
27. Positive Global Impact
As our success improves we will:
Donate funds to Non Profits who
specialize in Water Quality in
China’s Rural Areas
Develop a cheaper alternative to
our RO system to market to
those in China’s Rural Areas
28. Contribution to the
Global Organization
China has a high need for our product/service
Opportunity for continual expansion
High profit margins
Total Contribution of $33,974,075 after 3 years
Guaranteed to have a positive impact on rural China
We can find a simple solution to their big problem
Development of a more affordable RO will allow profit
margins to increase
